PLI scheme: Steel industry welcomes inclusion of specialty steel, but a few questions remain

The Indian steel industry has welcomed Finance Minister Nirmala Sitharaman's step to include the specialty steel in the list of sectors that can avail of the production linked incentive (PLI) scheme.

The Finance Minister has allocated Rs 6,322 crore for this segment of the steel industry.

"We welcome the move of Government of India in extending PLI scheme to speciality steel products. This will enable the steel industry to attract fresh investment and state of the art technology that would make India self-reliant in producing value-added speciality steel products" Seshagiri Rao, Joint MD, JSW Steel & Group CFO, said in a statement.

Dilip Oommen, CEO of ArcelorMittal Nippon Steel India, tweeted:

is WTO compliant and will help in realising the dream of India becoming a manufacturing hub of the world. Heartening to see Speciality Steel included in the key sectors selected."

But, off the record, industry executives await for granular details.

"One needs to know the definition of specialty steel that the government has considered. What all grades of steel will be included?" asks a senior executive.

Traditionally, specialty steel included the high-grade ones used by automakers or electrical steel that are needed to make transformers and generators.

Many of the Indian companies, including Tata Steel, JSW Steel and AM/NS, already make some these specialised steel products. Also, L&T Special Steels & Heavy Forgings and Kalyani Carpenter Special Steels Ltd, are among other players.

"But some of the automakers, especially the multinational ones, prefer to source steel from companies of their own countries," says a senior executive from a private steel maker.

Otherwise too, adds another executive, only 2 percent of the specialised steel used in the auto sector, is at present imported.

Even in electrical steel, it is only some of the niche products that are imported. "Only two-three companies in the world make these steel. They will never transfer their know-how. Anyways, there is not much demand for these steel products in India to warrant a local manufacturing base," said one of the executive quoted above.